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Iran protects cash from any U.N. sanctions

Iran's Central Bank said Friday it is moving the country's foreign exchange reserves out of European banks as a pre-emptive measure against possible U.N. sanctions over its nuclear program.
/ Source: The Associated Press

Iran is moving its foreign currency reserves out of European banks as a pre-emptive measure against any possible U.N. sanctions over its nuclear program, the Central Bank governor said Friday.

Ebrahim Sheibani told reporters that Iran has started transferring the foreign currency reserves from European banks to an undisclosed location, the semiofficial Iranian Students News Agency reported.

“We transfer the foreign exchange reserves to wherever we deem fit,” Sheibani was quoted by ISNA as saying. “We have begun transferring. We are doing that.”

Sheibani would not say how much money was involved and it was not immediately clear whether Iran’s investments in Europe would be affected by the move.

Iran is facing possible referral to the U.N. Security Council for its refusal to give up its uranium enrichment program. The council has the power to impose economic and political sanctions.

European powers have drafted a resolution that calls for referring Iran to the 15-nation council but stops short of asking for punitive measures against Iran. The International Atomic Energy, the U.N. nuclear watchdog, will meet Feb. 2 to discuss the draft.

1979 freeze
Iran’s assets in the United States were frozen shortly after the 1979 Islamic revolution that toppled the pro-Western Shah Mohammad Reza Pahlavi and installed a clerical regime.

The move suggests Iran has taken the issue of possible U.N. sanctions seriously. However, it has insisted that it won’t give up its right under the Nuclear Nonproliferation Treaty to enrich uranium and produce nuclear fuel.

Iran removed some U.N. seals from its main uranium enrichment facility in Natanz, central Iran, on Jan. 10 and resumed research on nuclear fuel — including small-scale enrichment — after a 2½-year freeze.

The shift alarmed Western nations that suspect Iran may be trying to produce nuclear weapons.

Uranium enriched to low levels is used to produce nuclear fuel for use in reactors producing electricity but further enrichment makes it suitable for use in building nuclear bomb.

Iran has rejected U.S. accusations that it was seeking to develop atomic bomb, saying its nuclear program is geared merely toward generating electricity.

Iranian experts say Iran’s accounts are protected by the Vienna Convention governing diplomatic relations, arguing that any seizure of the Iranian assets would be against international regulations.

Iran has previously complained that Britain blocked raw uranium it bought before the 1979 Islamic revolution; Germany refused to complete its only nuclear power plant and Paris has refused to release Iran’s uranium materials despite having a share at a uranium enrichment plant in France.